Sri Lanka’s rich natural assets key to future success

Hiran Cooray, Chairman of Jetwing Hotels Sri Lanka, joins David and Catherine to discuss the impact of the crisis on Sri Lanka. The island nation is no stranger to crisis, with last year’s Easter Sunday atrocities still fresh in everyone’s minds; however, he says this crisis is different. Sri Lanka has managed to avoid a significant outbreak of the virus thanks to rapid and strict lockdown measures. But the economic impacts are—and will continue to be—devastating.

Once tourism returns, Hiran believes a price war is inevitable. But he takes hope in Sri Lanka’s natural assets and its Ayurveda traditions, expecting these to win back domestic and international travellers alike in tomorrow’s changed world.

TRANSCRIPT

START AUDIO

David Keen 0:10Hi, this is David Keen. At QUO, we’ve worked for the last 20 years with many of the world’s best-known travel brands. During this precedented global crisis, our world of travel has changed, possibly irreversibly. This series will see us speak with many global leaders to understand how they see the future of travel.

David Keen 0:44Good morning Hiran Cooray, the Chairman of the Jetwing Group from Sri Lanka, and the former esteemed chairman of PATA. Hiran, good morning.

David Keen 1:13Hiran, everyone globally, as well as, certainly locally in Sri Lanka, has spoken incredibly highly about the way that the Sri Lankan government has managed to control the virus so far. How are things today in Colombo and how well do you.. how fast do we beginning to see a relaxation?

Hiran Cooray 1:38I think people are very, very pleased with the way the government, the medical services, the armed forces led by Lieutenant General Shavendra Silva, how they have all come together, you know, and to fight this virus. So it’s incredible. Even the more.. the optimist said that we will have 350-400 with all the lockdown in place by about the middle of April, but still we haven’t reached that figure. And that’s due to the very stringent rules and regulations imposed by the government led by President Rajapaksa, and the others, the people have supported them wholeheartedly. I think it’s so far—touch wood—managed very well. This Colombo is very quiet. People cannot move, other than essential services. People are more or less locked in. They cannot go around and do things as they please. Supermarkets are open, but, you know, provisions are given but people cannot go out.

David Keen 2:50How do you feel, I mean obviously as we start to come out of the crisis and I think all of us, and certainly in Asia are beginning to see a little bit of a few some glimmers of light, more than a few glimmers of light. The economic consequence of the virus is now starting to crystallize, and we feel is possibly a much greater concern than perhaps even the virus is. How do you feel the economy, the economic consequence will be felt in Sri Lanka?

Hiran Cooray 3:30I think for a small country like Sri Lanka, it’s severe. It’s very serious, because earlier as you know David—you know the country very well—Sri Lanka, used to get affected, only with tourism. But now, this is, you know, our dominant industry, remittances from overseas. You know, our export of tea and the spices—one that is going to get affected. So you know we are largely dependent on international trade, and that’s that’s going to really affect us, and the government also had borrowed money for infrastructure development and so on and so forth. In the next two/three years it’s going to really affect us, affect our economic very, very badly. And it’s actually frightening at some time, and moments you know when I prefer not to think of it too much, but it is frightening, how it’s going to impact the economy.

David Keen 4:26Right, and obviously it’s having an impact on the manufacturing sector and on the value of the rupee.

Hiran Cooray 4:35Yes, it has actually gone down to almost 200 rupees, appreciated a little bit and came up to 195, but you know, rupee is very, very weak today.

David Keen 4:46And that obviously will have a much longer term impact on the economy itself.

Hiran Cooray 4:54Yeah. Yeah.

David Keen 4:55Hiran, as we know, and we were talking before we started recording, Sri Lanka’s had its fair share of crises. It would be possibly a ridiculous understatement, and tragically we’re only one year off from the hideous atrocity of Easter Sunday. How different is this crisis?

Hiran Cooray 5:18Well, David earlier we faced many crises, as you know. But all that, it was confined to Sri Lanka. Right? The rest of the world economies were doing fabulously well, and they supported us, even after the Easter Sunday bombings, the rest of the world supported our recovery. So many pundits said it’ll take us 12 to 18 months to recover, but we started recovering after six months. That was due to the support we got from the international media, the tour operators, the online agents, everybody. All wished us well and supported us so that we could recover fast. But now the situation is different. This is… I mean 95% of the world’s borders are closed. Nobody can move around. There is a massive fear. People are paranoid. All other economies are, you know, suffering equally. So it’s… this kind of a thing I think you and I and, hopefully, you and I are not going to see, again. You know it is a once in a hundred year kind of situation and unfortunately we are alive to experience.

Catherine Monthienvichienchai 6:30Hiran—hi Hiran—picking up on this idea of recovery, I read that last week the cabinet approved a five-year global promotion initiative and also I think that the Sri Lankan tourism is also working with the UNDP on a roadmap to help tourism get back on its feet. In that roadmap they talk about two stages. Stage one phase, which is sort of looking at the December season, and then stage two is post-December. What confidence do you have in these initiatives, whether from the government or from outside agencies like the UNDP, to help the private sector get back on its feet?

Hiran Cooray 7:05The government has been quite helpful to be honest, to the tourism sector. They realise that tourism is one of the sectors that can really prop the economy up. And then they know it’s not because about a million people in Sri Lanka depend directly and indirectly on tourism. So it is a very, very important segment of Sri Lanka as economy. Government has come in now. They have given us a moratorium on, you know, loan repayment and the interest repayments, so that is a big, you know, comfort for the moment.

Hiran Cooray 7:43They’re also giving us two months’ working capital, at least to pay the permanent staff and so on, you know, until we start some form of recovery. Will the… I’m sure the international agencies like the UNDP as you mentioned, will be coming. I think the five-year plan you’re talking of, you know, which our chairman Kimarli Fernando mentioned to the media last week. It’s just that they’re getting […] ready for it. Because I think it’ll be futile to go out and start marketing a destination now when nobody can go out and when all the airlines are grounded.

Hiran Cooray 8:22So it’s just that, getting ready, being ready, because there are a lot of, you know, governmental rules and regulations. Once that’s approved, the cabinet has approved, but the process has to take place. So I think what they’re doing now is getting the, you know, all that all the, you know, stuff that needs to go through, get that done, so that they’ll be ready when it is opportune to launch the marketing campaign. So, hopefully, I pray, that at least by December, people will be travelling again. You know that’s—we had hoped that airlines will be flying—and then that the borders will be opened again, and people will be free to travel. You know, if that is not happening, then marketing will be, you know, should be done last.

Catherine Monthienvichienchai 9:16I mean, are you optimistic that by December we might have some kind of return, and if so, which markets, would you be looking at? If you look traditionally at Sri Lanka’s top source markets, many of them have been very badly affected by the crisis—UK, Germany, India as well is not looking great. How do you think— what shift do you see taking place in terms of those source markets? Are we looking at more domestic or regional travellers, or what is your take on that?

Hiran Cooray 9:42Yeah, I think it’s… everybody agrees that domestic will probably, you know, get off the ground first. Because obviously, you know, we are all locked in now and then, if once the curfew and the social distancing is relaxed a bit, people will start travelling again to the beaches and I mean, you know… I mean, I would love to go to the beach now and do a walk on the beach, and relax on the beach rather than be locked inside my apartment. Be that as it may, I mean, you know, so the domestic will start first. But until a vaccine or a cure for the virus is found, I can’t see international tourism really taking place.

Hiran Cooray 10:24If I have a mother or father living in another country, or my husband or wife living in another country, or children living in another country, I might go to see them. But you know, going through all these rigorous rules and regulations, and all of that. I mean will I travel on leisure going through all that? Very unlikely. So until all those, until we get back to our normal, at least, you know, people got used to all the strict security, you know, measures. So there should be some kind of, you know, health measures taken at airports and so on, but once that happens, once it’s open, then people will go.

Hiran Cooray 11:05Answering your specific question, I think it will be probably Australia. Australia and New Zealand are managing this virus very well. You know, and Australia was beginning to come in large numbers to Sri Lanka, and Sri Lankan Airlines was planning to flying to Sydney as well. They are flying directly to Melbourne now. So if that happens there could be quite a bit of Australians coming down here.

Hiran Cooray 11:33I believe China is now pretty much, you know, a country that has coming out of this situation, and Sri Lankan government has very close relations with China. So I can see Chinese coming in as well. The Middle East… the Middle East is silent at the moment. I’m not sure how… how much they will travel out or Ramadan and so on. So, you know, these are markets that will open up. And of course we are India’s, you know, tiny neighbour So if India gets the act together, we can see a lot of Indians coming here as well.

CatherineMonthienvichienchai 12:10And when those markets come back what kind of price war do you think you’re going to see, and how is that going to affect the rebound?

Hiran Cooray 12:18Sadly, there will be a huge price war. I mean, you know, as long as, you know, money-focused hoteliers and travel agents and everybody is there, you know, there is no love in this game. So I see a huge—it’d be a miracle if we can all come together and say, “Hey, let’s stick to our pricing”, or something like that. But that, I mean, you know, being an optimist I can’t still see this happening, so there will be price reductions.

Hiran Cooray 12:56Also don’t forget, Catherine, the consumer will be looking for big deals as well, right? I mean, you know, I had a German, you know, business partner once. He used to really… you know, during the conflict in Sri Lanka, when bombs are flying here, he used to say, “Hey, give a deal—stay two weeks, pay for one week—people forget that there were bombs in Sri Lanka.”

Hiran Cooray 13:20So similarly, you give these, you know, incredible deals, people will come. So maybe in the short term, maybe for about a month or two, it may not be a bad idea to give really attractive deals to get people back into the aircrafts, back into the hotel rooms and so on. But the price war forever? It’s going to, you know, ruin us.

Catherine Monthienvichienchai 13:44And thinking ahead when long-haul does start to return. How good a place is brand Sri Lanka in to benefit from that long-haul return? I mean, Sri Lanka was voted the top country in the world in 2019 by Lonely Planet. It’s been rising, I think, among consumers’ consciousness as a destination—a very aspirational destination—somewhere people really want to go to. Do you think any change needs to be made to brand Sri Lanka? Or is it in a good place to sort of benefit from that return—whether it’s in a year or two years—when really international travel comes back fully?

Hiran Cooray 14:15Yeah. Catherine, I mean, you know, what is what is now the biggest beneficiary at the moment is nature. Right? You know I… in Colombo, I can see the sea from here. The waters are, you know, every day the waters in the sea, and the sky is getting clearer and clearer. I can see the stars from you. I couldn’t see the stars before, because it was all hazy, right? So it’s all, you know, so Sri Lanka—I mean, I haven’t seen the you know the cultural trend for the last 45 days or the oil life paths. I’m sure they are even better.

Hiran Cooray 14:54Right? So the tourism product is going to be preserved and is going to be even better. And what’s coming out of this virus is Sri Lanka’s health service. Right? So this is a huge benefit for the people who are coming to know that we have very very good—I know Thailand has, Singapore has very good medical facilities. I mean, Sri Lanka also has equally good medical facilities. And the other is Sri Lanka Ayurveda, you know, which is a natural way of, you know, increasing your immunity, and so on.

Hiran Cooray 15:33So I see a lot of the Westerners who are over 60 and who want to get away from the winter, you know, with all the colds and the coughs and everything that you’re likely to catch there, to get away from it and spend three months or six months in, you know, Sri Lanka with Ayurveda hospitality, you know, being with local food and local herbs that increases your immunity as well. So, I mean once things open out, I see that segment—the wellness segment—going to improve, are going to increase a lot in Sri Lanka.

David Keen 16:12Hiran, I can imagine what you’re looking at. I mean, I’ve spent so much time, as you know, in Colombo.. and very often looking out over the green—over from the Galle Face or from where you are—at the water. And thinking about water actually clearing after all of the, all of the construction that’s happening, is actually a really lovely story.

David Keen 16:41Hiran, going to the consumer, and both domestic consumer, and hopefully very soon the regional or other international travellers, how do you feel—do you think—the price is going to impact them? How much are they going to be looking or something different in the products that they experience when they come to Sri Lanka?

David Keen 17:16David, I think people will—I mean, you know, if they make the move to travel, I think people will take longer holidays. You know, instead of just going from place to place. They’ll stay in one place. enjoy the area. Going to the slow-travel movement. Take things easy. Experience that area—you know that’s what I feel. Earlier it was all a rush job, you know. You go to some place for three days. You come back down, go somewhere else. That will change to a certain extent, adn people who have the time on their hands will travel, so that they get acclimatised to the climate and all of that—the food. So that’s the change I can see happening. Obviously, the travel restrictions have to be lifted. Once that happens, I see Sri Lanka benefiting from the middle-aged—you know, the middle-aged market, where they will come for longer stays on our island.

David Keen 17:32Catherine mentioned the price war, and you guys—obviously, we all despair of that. But there is going to be—it’s inevitable there’s going to be much more supply than demand. I mean, I think you know that goes without saying. Which brands are going to be in more demand post-crisis and why?

Hiran Cooray 18:17Well, I think, I think those who adhere to all these, you know, there’ll be new norms, obviously, you know when it comes to cleanliness when it comes to, you know. First and foremost protecting the associates who work in the hotels, and looking after the customers who come in. So that the brands or the organisations that adhere to all those new norms, the customer will feel comfortable going into them. I think that’s the most important.

Hiran Cooray 18:51And of course, the brands that are most known. I mean, you know, in people’s minds. I mean you know when—in Sri Lanka, I can name three to five brands that, you know, people think of when they go in, when they start planning a holiday amongst Sri Lankans. So those brands that are, you know, well-established will definitely benefit [more] than the ones who stand alone and so on. And then the customer won’t be comfortable , whether they’ll have the safety hygiene standards maintained, and so on and so forth.

David Keen 19:30Do you foresee changes in the way—the methodology that the consumer, whether it’s the FIT, or the wholesale, or travel agent booking. Do you see changes in the way the travellers will be making their bookings, researching their bookings, and then looking, and then executing into experience?

Hiran Cooray 19:54I think so. I think some of the senior travellers will rely on a travel agent and a tour operator—if they’re booking international rather than just an online direct agency—because they need to talk to somebody to find out what’s happening in that country, the details and so on.

Hiran Cooray 20:42You know, the time that he is logged into some booking engine and booked. Some hotel and transport and travel, that might change a bit. Because, you know, if I’m coming—say you’re going to Thailand, I mean even I would want to talk to a travel agent. I never used a travel agent travelling to Thailand, you know, but now I will need somebody to tell me, “Right, it’s safe for me to go to Phuket” or wherever. So similarly, someone coming here will need a tour operator in their country and a Sri Lankan agent. Because if something happens I know that there will be somebody to take care of them and so on.

Hiran Cooray 21:23So I think the need for the tour operator/travel agent partnership and the hotelier will get stronger again because that’s a credible source of information. And the rest will hopefully remain the same and we will have more people coming after maybe, what, 12/18/24 months.

David Keen 21:50Hiran Cooray, great friend of QUO. Great personal friend. Thank you so much for sharing your views with Catherina and I on The Future of Travel. Stay safe, Hiran, and our love and best wishes to everyone in Sri Lanka.

Hiran Cooray 22:05Thank you David and Catherine, and our blessings to you and everyone at QUO as well.

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